The Mountain Herald

Business

European grocery deal includes Giant, Food Lion

European retailers Ahold and Delhaize announced a $29 billion merger Wednesday, creating one of the largest supermarket groups in the United States and in Europe. In a statement, Netherlands-based Ahold said the deal will create more than 6,500 stores and the merged firms — Ahold Delhaize — will serve more than 50 million customers a week in the U.S. and in Europe.

Delhaize, which operates the Hannaford and Food Lion stores in the U.S., is headquartered in Brussels, Belgium. Dutch retailer Ahold operates U.S. grocery store chains Giant and Stop & Shop. Ahold shareholders will own around 61% of the combined company’s equity, while Delhaize shareholders will own about 39%.

Under the deal, Delhaize shareholders will receive 4.75 Ahold ordinary shares for each Delhaize ordinary share. The $28.6 billion value of the merger is based on the firms’ closing share prices Tuesday. Ahold’s shares rose 3% while Delhaize shares rose 1.7% on Wednesday’s news.

Ahold said it will terminate its ongoing share buyback program, and 1 billion euros ($1.1 billion) will be returned to Ahold shareholders via a capital return and a reverse stock split prior to the deal being completed. The merger is expected to be finalized in mid-2016, following approval from regulators and shareholders.